The Fintech Sector as an Investment: Old Wine in a New Bottle?

ABSTRACT The Fintech sector is traditionally viewed as a convergence of finance and technology. This study examines its characteristics by analysing Fintech stock returns relative to traditional sector portfolios using stepwise regression. Our findings show that Fintech stocks align more closely with the business services sector than with the financial or technology sectors, challenging conventional classification. Additionally, while Fintech indexes initially generated positive alpha, this advantage diminished as the sector matured. These results offer new insights into sector benchmarking and portfolio diversification.